Email Contracts

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 Are Emails Legally Binding as Contracts?

Email contract law may be thought of as an extension of contract law, which defines a legal contract as any agreement that is enforceable under contract laws. Most legal contracts are written and signed, although some jurisdictions will recognize oral agreements as legal contracts.

Generally speaking, it is best for a contract to be formalized in writing, especially for considerably valuable subject matters or for complex arrangements.

Legal contracts can be used by both individuals and organizations, such as businesses and corporations. Any legal contract must be entered into in such a way that is fair for both parties, and free of any fraud, coercion, and/or misrepresentations.

In order for a contract to be legally valid, it must fulfill all of the requirements for a valid contract which are set forth by both state and federal laws. As such, legal contract should meet all of the following requirements:

  • Offer and Acceptance: One party must make an offer, and the other party must accept the offer. Both offer and acceptance must be done in such a way that is both clear and unambiguous;
  • Assent: Both parties must mutually assent, or agree, to the terms of the contract. They should be clear regarding the terms, words, and definitions that are used in the agreement; and
  • Consideration: Each party must exchange something of value. An example of this would be how one party is generally providing a service or goods in exchange for monetary payment.

To reiterate, some contracts must be in writing in order for them to be legal. Examples include contracts for the sale of real property, and contracts for the sale of goods that are worth more than a certain amount of money. Generally, if it is over $500, it must be in writing).

The term “contracts” generally brings to mind agreements between parties that are committed to writing, and it is assumed that a contract is not valid unless it is on paper and signed. However, the vast majority of contracts are not written, and do not need to be in order for a court to enforce them.

Once again, a contract is simply an agreement between two or more parties to do something, or refrain from doing something, in exchange for some form of consideration. As such, an enforceable contract exists when there is an offer that is made by one party, accepted by the other party, and some exchange of value occurs between them.

This is why there is no reason that a contract entered into through email should not be legally enforceable. This is how email contracts are viewed under the law, especially contract law.

Is an Email Contract Enforceable If There Is No Signature? What if there is no signature?

To answer the question “are emails enforceable contracts?,” it is generally accepted that legally binding contracts can be established through email when an email is considered to be a legal document.

The Uniform Electronic Transactions Act (“UETA”) and the Electronic Signatures in Global and National Commerce Act are two significant pieces of legislation which have stated that electronic communications can constitute legally binding contracts. Additionally, the 2013 case of Forcelli v. Gelco applied the principles which guide these laws.

A representative of the Gelco Corporation’s insurance company offered the plaintiff $230,000 to settle the case, first orally, which was then reiterated in an email. The plaintiff agreed, but when Gelco tried to back out of the payment after winning the case, the New York Appellate Division ruled in a separate case that the email constituted a legally binding contract. As such, Gelco was required to pay the full amount on offer.

It is important to note that a signature is not generally required in order for a contract to be enforceable. Rather, the only requirement is that both parties consent to the agreement. Additionally, while a signature is considered to be the most reliable way of obtaining consent, it is not the only accepted method. As long as the parties write something that a reasonable person would consider to be acceptance, the email contract will be legally enforceable.

The consent to the agreement does not need to be on the same email as the agreement. What this means is that it is possible for consent to be twenty emails removed from the original agreement, and still have the effect of the email contract being legally valid.

Are There Any Exceptions or Issues Involved with Contracting by Email?

To reiterate, the validity of email contracts is generally accepted under the law. As such, it is important to be careful when doing business through email:

  • Remember that a contract does not need to be physically signed in order to be agreed to;
  • Remember that a contract may be created over a series of emails;
  • Under specific circumstances, a preliminary email may constitute a binding contract regardless of it referencing a future formal agreement that has yet to be agreed to;
  • Be careful of creating an “implied-in-fact” contract, which can happen through industry custom, as well as your own conduct;
  • Beware of using specific terms unless you intend their meaning. An example of this would be how “accept,” “agreement,” and “agree” can all be considered as binding acceptance of a contract in a court of law; and
  • If specific conditions are desired prior to entering into a contract, you will need to state them clearly. This should be done so that you do not not create the impression of a meeting of the minds when that is not the intent.

It is important to note that a considerably small subset of contracts must be committed to writing in order to be legally enforced. These include:

  • Contracts for the sale of real estate;
  • Contracts which, by their terms, cannot be performed in one year or less;
  • Contracts to assume the debt of another person; and
  • Contracts for the sale of goods that are priced at $500 or more.

One issue that may arise involves the authenticity of the emails between the parties. If one party wants out of a contract, they could plausibly claim that someone else accessed their email account, and entered the contract for them. However, other evidence should be able to resolve these issues easily.

Similarly, one party may claim that they did not know that the email was a contract. However, this issue of mutual assent is generally resolved by including: “sender intends to use and rely on this email as a valid contract,” or something similar. Because the court’s assumption is that the receiver actually reads a contract before agreeing to anything, including every part of the contract, the burden of proof shifts to the recipient.

An email cannot count as an oral contract, because the person answering the email cannot always be authenticated as the principal to the agreement. The primary evidence used to prove that an oral contract exists, which would be witnesses, are of little help in this context. This is why many jurisdictions may rule that email contracts are written contracts.

Can Emails Amend Existing Contracts?

Whether emails can amend existing contracts can differ between jurisdictions. Because many contracts require that a written and signed agreement is made before a contract can be amended, the question of whether an email can amend an existing contract will largely depend on whether the email is a written contract.

Other jurisdictions may state that the use of email in order to amend a contract violates the statute of frauds that can be found in many contracts. The statute’s purpose is to prevent fraudulent conduct from injuring the parties; as such, using email to amend a legal contract, when many people use email in an informal and casual manner, may be interpreted as a fraudulent means in which to change an otherwise valid contract.

Do I Need A Lawyer If I Have a Dispute Regarding a Contract on Email?

You should consult with a contracts lawyer if you have any questions regarding an email contract, or if you are experiencing any issues associated with the subject. Your contracts attorney can help you understand your legal rights and options according to your state’s specific laws, and will also be able to represent you in court, as needed.

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